A Former Spy On How To Think Smarter | Shane Parrish on The Rich Roll Podcast

Check out The Rich Roll Podcast Episode Page & Show Notes

Key Takeaways

  • “The better the tools you have for the particular situation you have, the better your thinking is likely to be”Shane Parrish
    • Mental models are a great tool for helping you identify your blind spots
  • The more irreversible the decision, the more time you want to take before making it
  • A valuable question to ask yourself: When you’re 90 years old, how do you want people to remember you? 
    • Your answer will help you decide what you really want in life
  • “Nobody’s ever taught you how to reflect…very few people ever sit down in life and say where do you want to go?” – Shane Parrish
  • “It’s easy to live your life by somebody else’s scorecard, it’s hard to live your life by your own scorecard, but only one of those is likely to make you satisfied”  – Shane Parrish
  • “I would rather fall short in life pursuing my dreams then spend the rest of my life regretting not pursuing my dreams” Shane Parrish
  • Something may not be your fault, but it is your responsibility how you handle the situation
    • “No matter what’s happened to me, it might not be my fault that I’m in this situation, but it’s my responsibility how I handle this situation going forward” – Shane Parrish

Intro

Books Mentioned

Shane’s Background

  • Shane studied computer science and then worked for an intelligence agency 2 weeks before 9/11 happened
    • Shane worked 6-7 days a week for 8-10 hours a day for 7 years straight
      • As Shane rose up the ranks, he realized his technical skills were becoming less important and his decision skills were becoming more important so he pursued an MBA to widen his education and become a better decision-maker
        • “I was very good with computers and less good with people” – Shane Parrish
  • Shane later learned that there is no skill called decision-making, but rather it’s a subset of skills
    • After an MBA classmate told Shane about Charlie Munger, Shane became fascinated with Munger’s way of thinking

Shane’s Website

  • Shane’s original blog was called 68131-1440, which was the zipcode of Berkshire Hathaway and their office number
    • Shane was still working at the intelligence agency so he keep himself anonymous
      • Shane’s boss sent him an article and said he should read it and Shane noticed it was his own article 
  • Around 2012, he changed the website’s name to Farnam Street–Berkshire Hathaway’s street address
  • Shane’s parents thought he was crazy to quit his stable government job to pursue his website full-time. However, he decided to take a year off work to give it a shot
    • “I would rather fall short in life pursuing my dreams then spend the rest of my life regretting not pursuing my dreams” Shane Parrish
  • Shane aims to create only evergreen content for his website so he avoids talking about politics or news
    • He wants people to listen to his podcast or read an article from years ago and still find the information valuable 
      • “You wouldn’t know if it was released yesterday or if it was released four years ago, and that’s the goal because we only want to talk about the timeless thing”Shane Parrish
  • Shane has a membership community that provides readers special content bonuses

How Human Behavior Shapes Decision-Making

  • You can’t make good decisions if you’re constantly pulled in a lot of different directions
    • Choose reflection over reaction
  • People are always looking for a shortcut, but it often backfires
    • Reading a summary of a book isn’t the same as reading the whole book
  • There’s no redo at the end of life, you only get one life so aim to make good decisions
    • When you make a mistake, reflect on it and ask yourself what will you do differently next time
  • Incentives play a huge role in human behavior, ask yourself: 
    • What type of incentive system you should create for your business?
    • Should you have different incentives for different levels in the organization?
    • How are they gamed?
  • Human biases also significantly change human behavior
    • Shane had Daniel Kahneman, who studied biases for 20+ years, on his podcast and Daniel said he’s still vulnerable to common biases
  • “So much of decision-making is pattern matching” – Shane Parrish
    • It’s important to take the time to recognize patterns and delay intuition instead of immediately acting on it
  • When making a decision, you have to think about the timeline
    • An owner is more likely to think long-term while a CEO looks at results one quarter at a time

Mental Models

  • A mental model is how people conceptualize an idea and use it 
    • “The better the tools you have for the particular situation you have, the better your thinking is likely to be”Shane Parrish
      • Mental models are a great tool for helping you identify your blind spots
  • The more irreversible the decision, the more time you want to take before making it
  • Popular mental models: 
    • The map is not the terrain–the map is the shallow view while the terrain gives much more information
      • Think of a map as an online profile of someone and the terrain as actually meeting the person
    • Circle of competence–If a decision is within your circle of competence, trusting your gut is a reasonable move
      • If it’s outside your circle of competence, your gut instinct is less valuable
    • Inversion–Think about way to avoid bad outcomes so you increase your chances of a good outcome 
      • Ask yourself, how do I avoid the outcomes that I don’t want?
    • First-order negative, second order positive–Do something that doesn’t feel good now to feel good later
      • Going to the gym may suck in the short-run, but being healthy and in great shape will feel good in the long-run 

Life Advice

  • A valuable question to ask yourself: When you’re 90 years old, how do you want people to remember you? 
    • Your answer will help you decide what you really want in life
  • “Nobody’s ever taught you how to reflect…very few people ever sit down in life and say where do you want to go?” – Shane Parrish
    • “We’re so focused on speed and the difference between speed and velocity is velocity has a destination”
      • The answer to what people want in life isn’t the same for everyone. Some people want money and power while others just want to spend more time with their family. 
  • “It’s easy to live your life by somebody else’s scorecard, it’s hard to live your life by your own scorecard, but only one of those is likely to make you satisfied”  – Shane Parrish
  • How you respond to failure will determine how successful you become
    • The odds of you achieving success the first time you try something are slim
      • Most successful people have failed hundreds of times but they got up and tried again
  • Happiness is the absence of desire
  • Aim to consume timeless knowledge. You don’t want to consume information that will expire in a week
  • Your environment will dictate a large part of your life, be selective with who you decide to associate with 
    • You can’t control where you’re born, but you do control where you want to go
  • Something may not be your fault, but it is your responsibility how you handle the situation
    • “No matter what’s happened to me, it might not be my fault that I’m in this situation, but it’s my responsibility how I handle this situation going forward” – Shane Parrish
Rich Roll Podcast : , , ,
Notes By Alex Wiec

More Notes on these topics

Top Insights and Tactics From

31 Best Podcasts of All Time

FREE when you join over 12,000 subscribers to the
Podcast Notes newsletter

No Thanks
Array
(
    [type] => 8
    [message] => Constant DISALLOW_FILE_EDIT already defined
    [file] => /var/www/vhosts/podcastnotes.org/httpdocs/wp-config.php
    [line] => 20
)